Intelsat sees softer gains; Community Health up on fellow hospital operator results; pharma down; Peabody up

By Colin Hanner

Chicago, Jan. 31 – New issuance in the high-yield market took the show for most active issues on Tuesday, traders said, though some pharmaceutical companies saw some definitive downward movement in the distressed market, and one telecommunications satellite company continued its rising trek.

Intelsat Jackson Holdings SA built on gains it had made in three previous sessions and saw increases in two separate series of notes, traders said.

“Everything in the cap structure has been moving up for the past couple of days now,” one of the traders said.

Healthcare and pharmaceutical names saw movement in either direction for different reasons of their own.

Community Health Systems, Inc. played a different tune on the session and were up due to the contagion of positive fourth quarter results for another hospital group, a trader said.

Two pharmaceutical companies – Valeant Pharmaceuticals International, Inc. and Concordia International Corp. – were both down on the day. Two large pharmaceutical companies released quarterly figures before the session, and President Trump met with executives from pharmaceutical companies to discuss price gouging in the industry and the rollback of regulations in the industry, among other topics.

Peabody Energy Corp. continued to trade with low volume, as has been the pattern for the past two sessions, but traded up a few more points in its unsecured securities, a trader said.

Several exploration and production names were mixed, Neiman Marcus Group, Inc. was down or unchanged in two series of distressed securities, and Avaya, Inc. was down on Tuesday after a quiet stretch of sessions.

Can’t stop Intelsat

The positive stretch for Luxembourg-based Intelsat Jackson Holdings continued Tuesday, albeit modestly.

A trader said the company’s 7¼% notes due 2019 were up ¾ point to 86½. A market source quoted the notes with a ¼-point increase to 86½.

“Those just continue to trade higher,” the trader said.

And the 5½% notes due 2023 were up ½ point to 70½, a market source said.

The source said the moves have culminated in a “4 to 5” point gain for the notes from recent lows the Jackson-held notes have had.

Community Health feels contagion

On Tuesday, HCA Holdings, Inc. released fourth quarter earnings, the results of which were attributable to Community Health Systems’ distressed notes’ upticks, a trader said.

Community Health’s 6 7/8% notes due 2022 were up ¾ point to 73¾, a trader said. Another trader said they traded at 84.

And the 8% notes due 2019 were up 5/8 point to 89½, a trader said. A market source said the notes were up closer to a point at the same handle.

HCA Holdings, which like Community Health is based in the Nashville metropolitan area, saw its equities increase 99 cents, or 1.25%, to $80.28 on the session.

Pharma down

In a meeting with top drug executives on Tuesday, President Trump told companies that they need to get drug prices lower for consumers, though said he would work toward stripping regulations that would quicken the process it takes for drugs to get to market, as well as implementing tax cuts for companies who relocate to the U.S.

Among the discussion’s participants was Dave Ricks, chief executive officer at Eli Lilly & Co., which, along with Pfizer Inc., released quarterly results on Tuesday.

According to market estimates, both companies fell short of expectations, but Trump’s apparent commitment to working with drug companies bolstered equities, but pared issued debt for the session.

Valeant Pharmaceuticals’ 7¼% notes due 2022 were down ¼ point to 84½, a trader said, while the 6 1/8% notes due 2025 were down ½ point to 75¼ on a “handful of trades.”

Concordia International’s 7% notes due 2023 were down ½ point to 37, a market source said.

Peabody grasps at gains

Since Friday, which saw a dramatic 20-point downswing for St. Louis-based Peabody Energy’s unsecured notes, the coal company has staged a low-volume comeback.

After Monday’s 8-point uptick, the notes were up another “couple of points” to 40, said one trader. A market source said the notes were up 2¾ points to 41.

E&P trades tight

Though the dollar fell amid the Trump administration’s push for a weak greenback, oil future prices reversed course to close slightly higher on Tuesday.

In distressed territory, drillers and producers alike traded tight, though mixed on the session.

Offshore driller Ensco plc’s 5¾% notes due 2044 were off “barely an 1/8” point to 80¼, a trader said.

GenOn Energy, Inc.’s 7 7/8% notes due 2017 were down “about an 1/8” point to 77¾.

And California Resources Corp.’s 8% notes due 2022 were up ½ point to 89½, a market source said.

Neiman mixed

After consistent hemorrhaging for Neiman Marcus, the retailer felt a soft loss in its 8¼% notes due 2021, which were down ¼ point to 58¾, a market source said.

Its 8% notes due 2021 flatlined on the session and were unchanged at 62, the source said.

One-off trades

After a series of quiet sessions, Avaya, Inc.’s 7% notes due 2019 were down 1 point to 83, a trader said.

Hydrocarbon refiner and processor Calumet Specialty Product Partners, LP traded once in its 7 5/8% notes due 2022, which were up 5/8 point to 86¼.

Global shipper Navios Maritime Holdings, Inc.’s 7 3/8% notes due 2022 were up 1½ point to 70, a 4¾-point gain since Friday’s session.

And Hertz Global Holdings, Inc.’s 5½% notes due 2024 were up ¼ point to 84½, a market source said.

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